Marano believes some customers have cut back due to pricing and perishability. “There used to be more holiday and weather-related demand, when we’d see big pushes for merchandise, but we don’t see that anymore, so we’ve had to adjust our buying. I think people overbought produce before, and a good portion of it was ultimately thrown away,” he explains. “People are a lot more conscious of their pocketbooks—they’re not buying as much produce because they don’t want it to go to waste.”
Operating expenses are also an ongoing challenge for Chi-Town produce businesses. “The most difficult thing is trying to make as much profit as you can on every item you have,” says Gonzalez.
Gaglione reflects the same sentiment, adding, “It’s tough to keep up with labor costs and operating expenses.”
On top of availability, pricing, shipping, food safety, and extreme weather, there are also legal issues to contend with—which is when the U.S. Department of Agriculture Perishable Agricultural Commodities Act (PACA) comes into play.
While most produce companies are well aware of the PACA trust and know it is designed to protect their business transactions and perishable assets, David A. Adelman, attorney at Adelman Law Offices LLC in the northwestern suburb of Schaumburg, says many can and should be more “proactive in protecting their receivables.” Adelman helps sellers, brokers, and repackers enforce their PACA trust rights in federal courts, including bankruptcy cases.
In addition to having a PACA license and including the standard statutory language on invoices, Adelman says sellers should always thoroughly research each buyer.
“If the buyer doesn’t have assets beside the produce being sold and doesn’t do much other business, there would be little to collect in the event they fail to pay and go out of business,” he points out. If this does happen, Adelman says produce sellers should seek legal advice as soon as possible. “With aggressive legal representation, creditor produce companies can protect themselves and collect on their receivables.”
A Peek into the Future
What does the future hold for Chicago produce? “I wish I had a crystal ball and could tell you,” laughs Gonzalez. “This market is so unpredictable; it’s like a rollercoaster. All I can tell you for sure is that our clientele and our market determine the business.”
Despite the challenges they face, most Chicago produce businesses remain optimistic about the coming years. Adelman adds, “Although some Chicago companies have become victims of the economy, I think the future is bright.”
Image: Thinkstock
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In 1883, Mark Twain wrote, “It is hopeless for the occasional visitor to try to keep up with Chicago. She outgrows his prophecies faster than he can make them.” When Twain penned those words, Chicago was less than 50 years old—yet the Windy City had already blossomed from a small trading post into one of the largest cities in the nation.
A number of other well known personalities were inspired by Chicago—from architects Louis Sullivan and Frank Lloyd Wright to French actress Sarah Bernhardt and poet laureate Carl Sandburg. Bernhardt characterized the city as “the pulse of America,” while Sandburg referred to the thriving industrial metropolis as the city of “Big Shoulders.” A more recent addition to the lore was present-day actor Michael Douglas, who said, “I’m impressed with the people from Chicago—Hollywood is hype, New York is talk, Chicago is work.”
All of these words ring true. A thriving hub of international trade, Chicago attracts billions in business and an estimated 86 million visitors each year—and continues to grow, evolve, and reinvent itself. This includes Chi-Town’s vibrant downtown and famous landmarks, such as the iconic Cloud Gate sculpture (created by Anish Kapoor and generally referred to as ‘the Bean’) in Millennium Park and the lovely Charles F. Buckingham Memorial Fountain, one of the world’s largest fountains, in Grant Park.
Then there’s the culture and nightlife, with more than 200 theaters, nearly 200 art galleries, and a remarkable 7,300 restaurants. These restaurants—large and small, world-famous or just starting out, pricey or inexpensive—boast a number of world-renowned chefs who are continually experimenting and looking for the next big thing.
And when these culinary artists are looking for fresh produce, they know where they can find a veritable treasure trove of fruit, vegetables, nuts, spices, and herbs—at the nearby Chicago International Produce Market.
A Modern Market…with a Century-Old Legacy
Huddled in the lower west side, the Chicago International Produce Market (CIPM) is a state-of-the-art facility consisting of just under two dozen merchants. The current site is the CIPM’s third location, but the market itself is more than 100 years old—and many of its merchants are third- and even fourth-generation family businesses.
Chicago International Produce Market Basics
2404 S. Wolcott Avenue
Chicago, IL 60608
info@cipm.org
(773) 376-5454
Open year-round, Monday through Friday
8:00 am to 12:00 pm (individual business hours may vary), call for further details
Though steeped in history, CIPM is anything but old-fashioned—it is a cutting-edge facility designed for today’s high-tech business world. The ‘new’ terminal market, on South Wolcott Avenue, opened in 2002 and replaced the historic South Water Street location (which was later transformed into apartments).
In addition to buying and selling produce from throughout the Untied States, Canada, and elsewhere, the CIPM’s businesses—both merchants and trucking operations—offer a host of services from cross docking and deliveries to ripening, custom packaging and repacking services, and private label programs.
While the market’s official hours are Monday through Friday from eight o’clock in the morning until noon, most merchants open their doors as early as 3:30 am and offer reduced hours on Saturdays. The market is open throughout the year except for six major holidays: New Year’s Day, Memorial Day, 4th of July, Labor Day, Thanksgiving, and Christmas.
Big-Time Benefits
Location & Reach
According to the market’s merchants, there are countless advantages to doing business in Chicago. First and foremost, CIPM benefits from a prime location—a few miles from Midway Airport, mere minutes from downtown, and about thirty minutes from huge O’Hare International Airport.
The market is ideally located for delivery anywhere in the vast Chicagoland area, which includes numerous suburbs and the northwestern corner of Indiana. Beyond the state line are Midwest partners Indiana, Michigan, and Wisconsin, and northerly neighbor Canada.
The market’s wholesalers serve up a cornucopia of fresh fruits and vegetables, along with various nuts, dried fruits, many herbs and spices, and specialty dry goods. From apples to zucchini, if a produce item is available somewhere in the world, there’s a good chance you can find it at Chicago’s terminal market.
Jason Gonzalez, transportation manager for J.L. Gonzalez Produce, Inc. says yes, the businesses at the CIPM face shoulder-to-shoulder competition, often selling the same items at similar prices right next door to each other. Yet this can work to their advantage when it comes to availability: “If one warehouse doesn’t have an item, you can find it from another to fill an order and still be able to provide for your customer,” he explains. “Business is always changing and evolving here in Chicago—it’s all about trying to get the edge and service your customer the best.”
Diversity
Produce businesses in the Windy City also reap the benefits of a truly diverse population of more than 2.71 million people, including sizeable Indian, Asian, Irish, Polish, and German populations and neighborhoods.
“Chicago is a large city—and I mean the suburbs as well—and we have many ethnic groups that have special needs, from Hispanic to Italian to Polish,” says Nick Gaglione, CEO of Dietz & Kolodenko Company. “Each area is a little different, and the small chains like Mariano’s and other independent stores better fit the communities they’re in. They know just what kind of food they want in that community—for example, you don’t sell Asian food in a Hispanic community.”
Chicago International Produce Market Merchant Directory
Company/Phone/Unit
Atom Banana, Inc.
(312) 226-4669 / 10-12
Cee Bee Cartage
(312) 243-3205 / 21
City Wide Produce Distributors, Inc.
(312) 666-6190 / 29-30
Coosemans Chicago, Inc.
(312) 226-6972 / 13
Dietz & Kolodenko Company
(312) 666-6320 / 24-25
Evergreen International Inc.
(312) 421-6434 / 8-9
Everyday Produce, Inc.
(773) 446-4930 / 14
George J. Cornille & Sons, Inc.
(312) 226-1015 / 4
J.L. Gonzalez Produce, Inc.
(312) 433-2335 / 1-7
JAB Produce Company
(312) 226-7805 / 23
Jack Keller Company
(312) 243-4019 / 21
Jack Tuchten Produce
(312) 226-4536 / 31
La Galera Produce, LLC
(773) 446-6161 / 26-27
La Hortaliza Produce, Inc.
(773) 677-1025 / 13
Mandolini Produce Company, Inc.
(312) 226-1690 / 28
Michael J. Navilio & Son, Inc.
(312) 243-7515 / 26-27
Olympic Wholesale Produce, Inc.
(312) 421-2889 / 15
Original Chicago Produce Company
(773) 376-5454 / 22
Panama Banana
(773) 446-1000 / 32-36
Strube Celery & Vegetable Company
(312) 226-6888 / 16-20
Tom Lange Company, Inc.
(773) 446-6899 / 33
“I think the diversity here has helped our market become more established, because we can bring in these specialty products for our customers to provide for their clientele,” Gonzalez comments. He says Pete’s Fresh Market, an independent market with nine stores in the Chicagoland area, specializes in meeting the needs of Chicago’s multicultural shoppers. “They cater to Chinese, Latino, and Indian customers, so they’re always looking for those special items.”
Availability
Despite the plentitude of fresh produce, there are still ‘food deserts’ within the Chicagoland area. Merchants at the CIPM have long been involved with the Greater Chicago Food Depository, which delivers food from a number of sources, including the CIPM, to a network of pantries, soup kitchens, shelters, and mobile programs.
The Food Depository was founded in 1979 by concerned Chicagoans including one of their own, Robert Strube, Sr., who was not only an active ambassador for the fresh fruit and vegetable industry through radio spots and chairing trade committees, but ran the family owned and operated Strube Celery & Vegetable Company, one of the market’s anchors and the oldest licensed produce wholesaler in the Chicago area.
A bit beyond the distribution and reach of the Food Depository is a newer concept—the mobile produce market—currently in use in Chicago and other cities.
Chicago’s version is a reconditioned Chicago Transit Authority bus filled with fruit and vegetables, operated by a nonprofit group called Fresh Moves. The bus travels around the city, stopping in hard-hit neighborhoods, schools, and community centers. Though the mobile program suffered some setbacks with costs and sourcing, group and community leaders hope it will be able to expand its reach in 2014 and beyond.
Distribution Shuffle
For some distributors, business is booming. “Over the last year, we have expanded with more contract foodservice business,” says Roger Riehm, owner of Blue Creek Produce, a produce distributor specializing in tomatoes, based in the western suburb of St. Charles, Illinois.
“Last year was a fairly decent year for us,” says Dietz & Kolodenko’s Gaglione. “We really cater to the independents in Chicago—the small chains are our bread and butter, and they come down to the market every day. Right now, the independent stores like Mariano’s are moving in and increasing, so that’s good for us.”
The Chicagoland area has seen a flurry of retail activity in recent months, much spurred by the closure of the underperforming Dominick’s Finer Foods grocery chain. The once-popular chain, founded in 1918 by Dominick DiMatteo, had fallen victim to the economy, stepped up competition, and union woes.
A total of 83 stores, put up for sale after parent company Safeway, Inc. was forced into action in 2013 by investor activist Carl Icahn, opened the door for players both large and small to gain prime locations.
Winners included Mariano’s Fresh Market, owned by Milwaukee, WI-based Roundy’s Supermarkets, as well as Chicagoland fixture Jewel-Osco (owned by New Albertsons, Inc.), which has operated stores in the area since the 1930s. Austin, TX-based Whole Foods Market also entered the fray, picking up a few stores, while other locations sprinkled throughout the city and suburbs were purchased by independents like Joe Caputo & Sons Fruit Market and Tony’s Finer Foods.
Other small or regional retailers, such as Angelo Caputo’s Farm Fresh Markets, which opened its first store in Elmwood Park, IL in 1958, and Greensboro, NC-based The Fresh Market, were also opening new stores in Chicago and its suburbs. Both chains were constructing stores in the western suburbs, with Caputo’s seventh opening in Carol Stream, and Fresh Market opening its seventh Illinois location in Glyn Ellyn.
In a twist of procuring truly ‘fresh’ and locally-grown fruits and vegetables for a grocery chain, Roundy’s announced a partnership with New York-based BrightFarms to build a hydroponic greenhouse in Chicago to provide produce for its Mariano’s stores in the region.
Whims of the Windy City
Gonzalez says that while business hasn’t necessarily exploded, it has certainly remained steady. Steady enough for J.L. Gonzalez Produce to expand, taking over additional units at the market. “We’re now the largest Mexican distributor at the CIPM, and we have the largest warehouse.”
In addition to year-round demand for ethnic commodities, as well as specialty fruits and vegetables, Chicago is also in the throes of the nationwide consumer craze for organics. According to the Organic Trade Association, the U.S. organic food sector has experienced double-digit growth for the last decade, with fruit and vegetables claiming a significant slice of the organics pie.
Overall organic food and beverage sales for 2012 topped $26 billion, climbing more than 10 percent from 2011. In fruits and vegetables, though category increases have slowed from the phenomenal 18 percent surge in 2003, growth rates have remained in the teens each year since, with 2011 sales rising nearly 12 percent and 2012 reaching just under 13 percent. Total organic produce sales for 2012 reached $9.7 billion, with fresh fruit and vegetables accounting for over 90 percent of these sales.
“We have seen an increase in organic tomatoes in the marketplace,” remarks Blue Creek’s Riehm. “We added four new organic tomato items under our Blue Creek Produce label that we presented at the Produce Marketing Association show last year in New Orleans. We hope organics will continue to grow and become 25 percent of our business.”
Anton J. Marano, chief operating officer of the Anthony Marano Company has also seen an uptick: “I’ve noticed an increase in demand, but for cheaper organic vegeta-bles. People want organics but not at the high prices. We offer a small selection of organics.”
Gaglione says Dietz & Kolodenko noticed a significant increase in organic apple and grape sales in 2013. “In 2012, we did maybe 1 percent, but last year it was about 10 percent…so it’s a sizeable increase.”
Chi-Town Challenges
Between the weather, the still-struggling economy, and increasingly rigorous food safety standards, Chicago produce businesses have encountered numerous obstacles in the past year.
Following a mild winter in 2013, the arctic cold of January and February 2014 and heavy snow managed to stymie some of the flow in and out of the city. The merchants, however, were well used to the cold and snow and soldiered on, remaining open for business.
Fresh Forum
Have changes in the Chicagoland retail sector—such as Safeway, Inc. selling its Dominick’s stores and the expansion of chains like Mariano’s, Whole Foods, and Caputo’s—had any effect on your business?
Roger Riehm – Blue Creek Produce
It’s a good thing; Chicago is still the strongest Midwestern area for produce sales. The expansion of Mariano’s, Whole Foods, and Caputo’s in the area shows that Chicago is offering the consumer the best quality produce.
Nick Gaglione – Dietz & Kolodenko Company
Mainly, it’s been positive. We try to cater to these chains, meet their needs, and make sales and deliveries to their stores so they can serve their customers.
Jason Gonzalez – J.L. Gonzalez Produce, Inc.
I don’t think it has affected our business. I feel we have a special niche since we’re distributors of Mexican produce, and every retailer and every store needs to carry a line of ethnic items. We work with a lot of independent mom-and-pop stores.
Anton J. Marano – Anthony Marano Company
It seems like the changes in retail are stimulating a lot of good change. I think many of the independent grocers and even the chains see this as an opportunity to do a better job with the consumer, so I think everybody is trying to step up their game.
“Right now, the emphasis is still with food safety, and this is evident with the tougher U.S. Food and Drug Administration (FDA) laws and increased border inspec-tions,” Riehm commented. “Consumers still want value and price still is important, but they will still search for good quality produce. We continue to work with growers that are certified to keep safety and quality first priority.”
Marano believes some customers have cut back due to pricing and perishability. “There used to be more holiday and weather-related demand, when we’d see big pushes for merchandise, but we don’t see that anymore, so we’ve had to adjust our buying. I think people overbought produce before, and a good portion of it was ultimately thrown away,” he explains. “People are a lot more conscious of their pocketbooks—they’re not buying as much produce because they don’t want it to go to waste.”
Operating expenses are also an ongoing challenge for Chi-Town produce businesses. “The most difficult thing is trying to make as much profit as you can on every item you have,” says Gonzalez.
Gaglione reflects the same sentiment, adding, “It’s tough to keep up with labor costs and operating expenses.”
On top of availability, pricing, shipping, food safety, and extreme weather, there are also legal issues to contend with—which is when the U.S. Department of Agriculture Perishable Agricultural Commodities Act (PACA) comes into play.
While most produce companies are well aware of the PACA trust and know it is designed to protect their business transactions and perishable assets, David A. Adelman, attorney at Adelman Law Offices LLC in the northwestern suburb of Schaumburg, says many can and should be more “proactive in protecting their receivables.” Adelman helps sellers, brokers, and repackers enforce their PACA trust rights in federal courts, including bankruptcy cases.
In addition to having a PACA license and including the standard statutory language on invoices, Adelman says sellers should always thoroughly research each buyer.
“If the buyer doesn’t have assets beside the produce being sold and doesn’t do much other business, there would be little to collect in the event they fail to pay and go out of business,” he points out. If this does happen, Adelman says produce sellers should seek legal advice as soon as possible. “With aggressive legal representation, creditor produce companies can protect themselves and collect on their receivables.”
A Peek into the Future
What does the future hold for Chicago produce? “I wish I had a crystal ball and could tell you,” laughs Gonzalez. “This market is so unpredictable; it’s like a rollercoaster. All I can tell you for sure is that our clientele and our market determine the business.”
Despite the challenges they face, most Chicago produce businesses remain optimistic about the coming years. Adelman adds, “Although some Chicago companies have become victims of the economy, I think the future is bright.”
Image: Thinkstock
Amy Bell is a professional freelance writer with more than ten years of writing and marketing experience.
